SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 30, 2000
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Southern Energy, Inc.
(Exact name of registrant as specified in its charter)
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Delaware 001-16107 58-2056305
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(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) No.)
1155 Perimeter Center West Suite 100, Atlanta, Georgia 30338
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (678) 579-7000
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N/A
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(Former name or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets.
On August 23, 2000, WPD Limited ("WPDL"), a company at that time 40% owned by a
subsidiary of Southern Energy, Inc. ("Southern Energy") and 60% owned by a
subsidiary of PPL Corporation ("PPL"), made an offer to acquire all of the
outstanding shares of Hyder plc ("Hyder") for a total purchase price for the
ordinary shares of Hyder of approximately (pound)565 million (approximately $847
million), or 365 pence (approximately $5.47) per Hyder share, plus the
assumption of approximately (pound)2.1 billion (approximately $3.2 billion) of
debt as of March 31, 2000. Hyder owns and operates the electricity network in
South Wales and the water distribution and wastewater treatment business for all
of Wales. On September 15, 2000, WPDL committed unconditionally to purchase any
shares of Hyder tendered by Hyder shareholders. As of September 30, 2000, WPDL
had purchased from shareholders approximately 71% of the Hyder shares. On
October 30, 2000, WPDL finalized the acquisition of Hyder by making payment for
the additional shares needed to bring WPDL's ownership over 90%. Under UK
company law, the acquisition of more than 90% of the outstanding shares allowed
WPDL to acquire the remaining shares at its option. On October 31, 2000, WPDL
exercised this right by sending notification to the outstanding shareholders and
now owns 100% of Hyder.
As part of the arrangement between Southern Energy and PPL, Southern Energy had
a call right to acquire an additional 9% of the shares in WPDL from PPL and to
acquire a proportionate interest (based on its ownership interest) of the
shareholder loans to WPDL and WPD Holdings for a total consideration of
approximately $38 million. Southern Energy exercised that right effective
December 1, 2000.
WPDL's acquisition of the outstanding shares of Hyder was financed through a
combination of loans from its shareholders and affiliate companies. In September
2000, WPD Holdings UK ("WPD Holdings"), an indirect 49% owned subsidiary of
Southern Energy, closed a (pound)210 million (approximately $310 million)
364-day term loan facility (the "Facility") arranged through Citibank to finance
part of the purchase price paid by WPDL for the Hyder shares. The Facility's
initial interest rate is LIBOR plus 90 basis points per annum. Once WPD Holdings
obtains a rating for its senior unsecured debt from Standard & Poor's and
Moody's, the interest rate margin over LIBOR will be based on a ratings grid. As
the Facility was drawn, proceeds were loaned to WPDL to purchase Hyder shares.
Furthermore, the shareholders of WPD Holdings made subordinated loans to WPD
Holdings of (pound)150 million (approximately $222 million) which WPD Holdings
loaned to WPDL, and the shareholders of WPDL made loans to WPDL of (pound)140
million (approximately $207 million), in each case to fund the Hyder share
purchase. The shareholder loans were made in proportion to the respective
shareholders' ownership interest. In addition, Western Power Distribution, a
wholly owned subsidiary of WPD Holdings, loaned WPDL (pound)85 million
(approximately $126 million) to fund the Hyder share purchase.
Furthermore, in conjunction with the completion of this acquisition and with the
approval of lenders, Southern Energy and a subsidiary of PPL, effective December
1, 2000, have modified the voting rights of WPD Holdings to 50% each so that
each party will equally share operational and management control of WPD
Holdings.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Form 8-K includes forward-looking statements in addition to
historical information. These statements involve known and unknown risks and
relate to future events, Southern Energy, Inc.'s future financial performance or
its projected business results. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential" or "continue" or
the negative of these terms or other comparable terminology. Forward-looking
statements are only statements of intent, belief or expectations. Actual
events or results may differ materially from any forward-looking statement as a
result of various factors. These factors include: legislative and regulatory
initiatives regarding deregulation and restructuring of the electric utility
industry; the extent and timing of the entry of additional competition in the
markets of Southern Energy, Inc.'s subsidiaries and affiliates; Southern Energy,
Inc.'s pursuit of potential business strategies, including acquisitions or
dispositions of assets or internal restructuring; state, federal and other rate
regulations in the United States and in foreign countries in which its
subsidiaries and affiliates operate; changes in or application of environmental
and other laws and regulations to which Southern Energy, Inc. and its
subsidiaries and affiliates are subject; political, legal and economic
conditions and developments in the United States and in foreign countries in
which the Southern Energy, Inc.'s subsidiaries and affiliates operate; financial
market conditions and the results of its financing efforts; changes in commodity
prices and interest rates; weather and other natural phenomena; Southern Energy,
Inc.'s performance of projects undertaken and the success of its efforts to
invest in and develop new opportunities; and other factors. Although Southern
Energy, Inc. believes that the expectations reflected in the forward-looking
statements are reasonable, it cannot guarantee future results, events, levels of
activity, performance or achievements.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of the businesses acquired.
Reference is made to the section entitled "Report of
Independent Accountants and Financial Statements of Hyder
plc," (pages F-132 to F-206) in the prospectus filed by
Southern Energy, Inc. with the SEC on September 27, 2000
pursuant to Rule 424(b) under the Securities Act of 1933, as
amended, with respect to Southern Energy's registration
statement on Form S-1 (Registration No. 333-35390), for
financial statements and other information regarding Hyder
plc.
(b) Pro forma financial information.
Reference is made to the section entitled "Introduction to
Unaudited Pro Forma Financial Information" (pages F-207 to
F-214) in the prospectus filed by Southern Energy, Inc. with
the SEC on September 27, 2000 pursuant to Rule 424(b) under
the Securities Act of 1933, as amended, with respect to
Southern Energy's registration statement on Form S-1
(Registration No. 333-35390), for pro forma financial
information regarding the acquisition of Hyder plc and the
deconsolidation of WPD.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: December 5, 2000 SOUTHERN ENERGY, INC.
By /s/ James A. Ward
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James A. Ward
Senior Vice President, Finance
And Accounting
(Principal Accounting Officer)